Commission Delegated Regulation (EU) 2019/331Dangos y teitl llawn

CHAPTER I U.K. General provisions

Article 1 U.K. Scope

This Regulation shall apply to the free allocation of [F1 allowances to installations under the UK ETS].

Textual Amendments

F1 Words in Art. 1 substituted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 3(2)

Article 2 U.K. Definitions

1. [F2 For the purposes of this Regulation, the following definitions apply:]

(1)

[F3 ‘incumbent installation’ means an installation in respect of which a deemed application for free allocation in the 2021-2025 allocation period or an application for free allocation in the [F4 2027-2030] allocation period under Article 4 is made;]

(2)

‘product benchmark sub-installation’ means inputs, outputs and corresponding emissions relating to the production of a product for which a benchmark has been set in Annex I;

(3)

‘heat benchmark sub-installation’ means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production other than produced from electricity, the import from an installation covered by the EU ETS [F5 or UK ETS], or both, of measurable heat which is:

(a)

consumed within the installation's boundaries for the production of products, for the production of mechanical energy other than used for the production of electricity, for heating or cooling with the exception of the consumption for the production of electricity, or

(b)

exported to an installation or other entity not covered by the EU ETS [F5 or UK ETS] other than district heating with the exception of the export for the production of electricity;

(4)

‘district heating’ means the distribution of measurable heat for the purpose of heating or cooling of space or of production of domestic hot water, through a network, to buildings or sites not covered by EU ETS [F6 or UK ETS] with the exception of measurable heat used for the production of products and related activities or the production of electricity;

(5)

‘district heating sub-installation’ means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production, the import from an installation covered by the EU ETS [F7 or UK ETS], or both, of measurable heat which is exported for the purposes of district heating;

(6)

‘fuel benchmark sub-installation’ means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production of non-measurable heat by fuel combustion consumed for the production of products, for the production of mechanical energy other than used for the production of electricity, for heating or cooling with the exception of the consumption for the production of electricity, including safety flaring;

(7)

‘measurable heat’ means a net heat flow transported through identifiable pipelines or ducts using a heat transfer medium, such as, in particular, steam, hot air, water, oil, liquid metals and salts, for which a heat meter is or could be installed;

(8)

‘heat meter’ means a thermal energy meter (MI-004) within the meaning of Annex VI to Directive 2014/32/EU of the European Parliament and of the Council(1) or any other device to measure and record the amount of thermal energy produced based upon flow volumes and temperatures;

(9)

‘non-measurable heat’ means all heat other than measurable heat;

(10)

‘process emissions sub-installation’ means [F8 emissions of greenhouse gases set out in column 2 of table C in Schedule 2 to the UK ETS Order] other than carbon dioxide, which occur outside the system boundaries of a product benchmark listed in Annex I to this Regulation, or carbon dioxide emissions, which occur outside the system boundaries of a product benchmark listed in Annex I to this Regulation, as a direct and immediate result of any of the following processes and emissions stemming from the combustion of waste gases for the purpose of the production of measurable heat, non-measurable heat or electricity, provided that emissions that would have occurred from the combustion of an amount of natural gas, equivalent to the technically usable energy content of the combusted incompletely oxidised carbon, are subtracted:

(a)

the chemical, electrolytic or pyrometallurgical reduction of metal compounds in ores, concentrates and secondary materials for a primary purpose other than the generation of heat;

(b)

the removal of impurities from metals and metal compounds for a primary purpose other than the generation of heat;

(c)

the decomposition of carbonates, excluding those for flue gas scrubbing for a primary purpose other than the generation of heat;

(d)

chemical syntheses of products and intermediate products where the carbon bearing material participates in the reaction, for a primary purpose other than the generation of heat;

(e)

the use of carbon containing additives or raw materials for a primary purpose other than the generation of heat;

(f)

the chemical or electrolytic reduction of metalloid oxides or non-metal oxides such as silicon oxides and phosphates for a primary purpose other than the generation of heat;

(11)

‘waste gas’ means a gas containing incompletely oxidised carbon in a gaseous state under standard conditions which is a result of any of the processes listed in point (10), where ‘standard conditions’ means temperature of 273,15 K and pressure conditions of 101 325 Pa defining normal cubic metres (Nm³) according to [F9 Article 3(52) of the Monitoring and Reporting Regulation 2018];

(12)

‘start of normal operation’ means the first day of operations;

(13)

‘safety flaring’ means the combustion of pilot fuels and highly fluctuating amounts of process or residual gases in a unit open to atmospheric disturbances which is explicitly required for safety reasons by relevant permits for the installation;

(14)

[F10 ‘baseline period’ means:

(a)

in relation to a deemed application for free allocation in the 2021-2025 allocation period or an incumbent installation in respect of which such an application is made, the 5-year period beginning on 1 January 2014;

(b)

in relation to an application for free allocation in the [F11 2027-2030] allocation period under Article 4 or an incumbent installation in respect of which such an application is made, the 5-year period beginning on 1 January 2019;]

(15)

F12 ...

(16)

‘uncertainty’ means a parameter, associated with the result of the determination of a quantity, that characterises the dispersion of the values that could reasonably be attributed to the particular quantity, including the effects of systematic as well as of random factors, expressed in per cent, and describes a confidence interval around the mean value comprising 95 % of inferred values taking into account any asymmetry of the distribution of values;

(17)

‘merger’ means a fusion of two or more installations already holding greenhouse gas permits provided that they are technically connected, operate on the same site and the resulting installation is covered by one greenhouse gas permit;

(18)

‘split’ means a division of an installation into two or more installations that are covered by separate greenhouse gas permits and are run by different operators;

(19)

[F13 ‘deemed application for free allocation in the 2021-2025 allocation period’ must be construed in accordance with Article 3a;

(20)

[F14 “electricity generator” must be construed in accordance with Article 2c;]

(21)

‘emission allowance’ means an allowance (as defined in the UK ETS Order);

(22)

‘new entrant’ means an installation in respect of which an application for free allocation under Article 5 is made;

(23)

‘UK ETS Order’ means the Greenhouse Gas Emissions Trading Scheme Order 2020];

(24)

[F15 “relevant CHP electricity” has the meaning given in Article 2c(6)];

(25)

[F16 “upstream GHG removal” means upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the UK ETS Order) on or after the relevant date (as defined in that sub-paragraph)];

(26)

[F17 first stage” and “second stage”, in relation to an application under Article 4 for free allocation in the 2027-2030 allocation period, must be construed in accordance with that Article.]

2. [F18 Expressions used in this Regulation that are defined for the purposes of the Climate Change Act 2008 or the UK ETS Order have the meanings given in that Act or Order.

3. A reference in this Regulation to a “non-ETS” entity, installation or process is a reference to an entity, installation or process that is not covered by either the EU ETS or the UK ETS.]

4. [F19 References in this Regulation to benchmarks for an allocation period are references to the benchmarks for the allocation period set out in Annex 8; but if no benchmarks for the 2027-2030 allocation period are set out in Annex 8 before the regulator is required to calculate the preliminary annual number of allowances to be allocated for scheme years in that period, the benchmarks for the 2021-2025 allocation period and the 2026 allocation period are to be used for the calculation.]

Textual Amendments

F2 Art. 2 renumbered as Art. 2.1 (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(2)

F3 Art. 2.1(1) substituted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(a)

F4 Word in Art. 2.1 substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 34(2)(a)

F5 Words in Art. 2.1(3) inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(b)

F6 Words in Art. 2.1(4) inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(c)

F7 Words in Art. 2.1(5) inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(d)

F8 Words in Art. 2.1(10) substituted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(e)

F9 Words in Art. 2.1(11) substituted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(f)

F10 Art. 2.1(14) substituted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(g)

F11 Word in Art. 2.1(14)(b) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 34(2)(b)

F12 Art. 2.1(15) omitted (31.12.2020) by virtue of The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(h)

F13 Arts. 2.1(19)-(23) inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(3)(i)

F14 Art. 2.1(20) substituted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 12(2)(a) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F15 Art. 2.1(24) inserted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 12(2)(b) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F16 Art. 2.1(25) inserted (1.1.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024 (S.I. 2024/1366), arts. 2(2)(b), 34(2)

F17 Art. 2.1(26) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 34(2)(c)

F18 Art. 2.2, 2.3 inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 4(4)

F19 Art. 2.4 inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 34(3)

[F20 Article 2a U.K. Eligibility for free allocation

(1)

An application for free allocation of allowances may not be made under this Regulation in respect of:

(a)

F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

an electricity generator, except in relation to measurable heat:

(i)

produced by an electricity generator that produced measurable heat by means of high-efficiency cogeneration (as defined in Article 2(34) of Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012) F22 ...; or

(ii)

exported for the purposes of district heating.

(2)

For the purposes of [F23 this Article]:

(a)

the “relevant period” is:

(i)

in the case of a deemed application for free allocation in the 2021-2025 allocation period or an application for free allocation in the [F24 2027-2030] allocation period under Article 4, the baseline period;

(ii)

in the case of an application for free allocation under Article 5 [F25 made after the end of the first full calendar year after the start of normal operation of a heat benchmark sub-installation], the period from the start of normal operation until the end of the year before the year in which the application is made;

(b)

Directive 2012/27/EU has effect as if in Annex 2 in point (a) in the first indent after “heat and electricity” there were inserted “ ; and for the purposes of this indent, cogeneration production from cogeneration units certified under the standard applying from time to time for the purposes of the Combined Heat and Power Quality Assurance Programme that provides primary energy savings during the period of certification must be treated as providing primary energy savings of at least 10% during that period ”.

(3)

[F26 An application for free allocation may be made in respect of an electricity generator in relation to measurable heat [F27 , or the first stage of such an application under Article 4 may be completed,] whether or not at the date of the application [F28 , or of the completion of the first stage,] the electricity generator has produced measurable heat by means of high-efficiency cogeneration or has exported measurable heat for the purposes of district heating.

(4)

Paragraphs 5 and 6 apply where an application for free allocation is made in respect of an electricity generator in relation to measurable heat [F29 or where the first stage of such an application under Article 4 is completed].

(5)

For the purposes of Chapter 3 of this Regulation [F30 , Articles 3a to 6a of the Activity Level Changes Regulation and Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025] (which relate to the calculation of free allocation), the installation must be treated as not including any heat benchmark sub-installation unless the heat benchmark sub-installation:

(a)

in a case where the installation includes the heat benchmark sub-installation at the date of the application and the application is made under Article 4 or under Article 5 after the end of the first full calendar year after the start of normal operation of the sub-installation [F31 , or in a case where the installation includes the heat benchmark sub-installation at the date of completion of the first stage of an application under Article 4], produced measurable heat by means of high-efficiency cogeneration in the relevant period, calculated over the relevant period as a whole; or

(b)

in any other case, produces measurable heat by means of high-efficiency cogeneration in any subsequent qualifying period, calculated over the subsequent qualifying period as a whole.

(6)

Where paragraph 5(b) applies, Article 3a of the Activity Level Changes Regulation applies to the heat benchmark sub-installation as if its start of normal operation, if before the beginning of the subsequent qualifying period, were at the beginning of the subsequent qualifying period.

(7)

In paragraphs 5 and 6, “subsequent qualifying period” means, in relation to a heat benchmark sub-installation, any period including at least one full calendar year of operation of the heat benchmark sub-installation that:

(a)

ends with 31 December:

(i)

in the case of an application under Article 4, in any scheme year (“year 2”) beginning with the second scheme year after the baseline period;

(ii)

in the case of an application under Article 5, in any scheme year (“year 2”) beginning with the first scheme year for which a report on the activity level of the sub-installation in that year is required under Article 3 of the Activity Level Changes Regulation; and

(b)

begins with 1 January in the scheme year preceding year 2 or, if the start of normal operation of the heat benchmark sub-installation is later, the start of normal operation of the sub-installation.

(8)

The following regulated activities are not eligible for free allocation:

(a)

the capture of greenhouse gases from a regulated activity for the purpose of transport and geological storage in a storage site;

(b)

the transport of greenhouse gases by pipelines for geological storage in a storage site;

(c)

the geological storage of greenhouse gases in a storage site.]]

Textual Amendments

F20 Art. 2a inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 5

F21 Art. 2a(1)(a) omitted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by virtue of The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 13(2)(a) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F22 Words in Art. 2a(1)(b)(i) omitted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by virtue of The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 13(2)(b) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F23 Words in Art. 2a(2) substituted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 13(3)(a) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F24 Word in Art. 2a(2)(a)(i) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(2)

F25 Words in Art. 2a(2)(a)(ii) inserted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 13(3)(b) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F26 Art. 2a(3)-(8) inserted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 13(4) (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F27 Words in Art. 2a(3) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(3)(a)

F28 Words in Art. 2a(3) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(3)(b)

F29 Words in Art. 2a(4) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(4)

F30 Words in Art. 2a(5) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(5)(a)

F31 Words in Art. 2a(5)(a) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 35(5)(b)

[F32 Article 2b U.K. Free allocation in [F33 2026 and 2027-2030 allocation periods]: applications by incumbent installations that will not produce electricity for sale for consumption outside the installation

1. Despite Article 2a(1)(b), an application under Article 4 for free allocation in the [F34 2027-2030] allocation period may be made in respect of an installation that is an electricity generator as if the restriction referred to in Article 2a(1)(b) did not apply, provided that [F35 the documents submitted as part of the first stage of the application are] accompanied by a statement by the operator of the installation that the condition in paragraph 2 will be met.

2. The condition is that the installation will not produce any electricity (other than relevant CHP electricity) for sale for consumption outside the installation in the period beginning with the date of [F36 the submission of documents as part of the first stage of] the application and ending with 31 December 2030 (the “relevant period”).

3. Where [F37 the documents submitted as part of the first stage of such an application are] accompanied by the statement referred to in paragraph 1:

(a)

the regulator must assess the statement and any evidence provided and include the statement, evidence and regulator’s assessment in the information sent to the UK ETS authority under Article 15a(3) for assessment by the UK ETS authority under Article 15a(4) [F37 or, where relevant, under article 7(8) of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 for assessment under article 7(9) of that Order];

(b)

if the UK ETS authority considers that the condition in paragraph 2 will be met, for the purposes of determining the application, the application must be treated as made in respect of an installation that is not an electricity generator (and to which the restriction in Article 2a(1)(b) does not apply);

(c)

if the UK ETS authority does not consider that the condition in paragraph 2 will be met, the UK ETS authority must inform the regulator, and the regulator must inform the operator of the installation.

4. Paragraphs 5 to 8 apply where:

(a)

an application under Article 4 for free allocation in the [F38 2027-2030] allocation period in respect of an electricity generator is treated as made in respect of an installation that is not an electricity generator in accordance with paragraph 3(b) and is assessed as valid under Article 15a(4) [F39 or, in the case of a type 2 2026 incumbent (as defined in Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025), under article 7(9) of that Order]; and

(b)

the regulator considers at any time (including on receipt of a report under Article 3 of the Activity Level Changes Regulation) that the installation has produced electricity (other than relevant CHP electricity) for sale for consumption outside the installation in the relevant period.

5. The regulator must:

(a)

determine the historical activity level (if any) of each sub-installation of the installation that the regulator considers would have been determined under this Regulation or the Activity Level Changes Regulation [F40 or, in the case of a type 2 2026 incumbent, Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025] if the application had been treated as made in respect of an electricity generator (and to which the restriction in Article 2a(1)(b) applies);

(b)

calculate the preliminary and final annual number of allowances (if any) to be allocated in respect of the installation, and of each sub-installation of the installation, for each scheme year in the [F41 2026 allocation period and the 2027-2030] allocation period beginning with the relevant scheme year, that the regulator considers would have been calculated under this Regulation [F42 , the Activity Level Changes Regulation and Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025] if the application had been treated as made in respect of an electricity generator (and to which the restriction in Article 2a(1)(b) applies);

(c)

send evidence of the matters referred to in paragraph 4(b) and the determination and calculation referred to in points (a) and (b) of this paragraph to the UK ETS authority.

6. If the UK ETS authority considers that the installation has produced electricity (other than relevant CHP electricity) for sale for consumption outside the installation in the relevant period, the UK ETS authority must:

(a)

approve the final annual number of allowances to be allocated in respect of the installation, for each scheme year in the [F43 2026 allocation period and the 2027-2030] allocation period beginning with the relevant scheme year, making any corrections to the historical activity levels or preliminary or final annual number of allowances that the UK ETS authority considers appropriate;

(b)

inform the regulator accordingly.

7. The regulator must give notice to the operator of the installation of the final annual number of allowances approved.

8. For the purposes of Article 5 of the Activity Level Changes Regulation, the reference in paragraph 3 of that Article to the initial allocation must be read as including a reference to the initial allocation that would have been approved if the application had been treated as made in respect of an electricity generator (and to which the restriction in Article 2a(1)(b) applies).

9. Where paragraph 4(a) applies to an installation, unless the final annual number of allowances is recalculated and approved under paragraphs 5 and 6, despite the amendment made to Article 3(2) of the Activity Level Changes Regulation by article 22 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023, the activity level report required by Article 3 of the Activity Level Changes Regulation must contain the information referred to in section 1.4(e) of Annex 4 to this Regulation.

10. In this Article, “relevant scheme year”, in relation to an installation, means:

(a)

if the installation first produces electricity (other than relevant CHP electricity) for sale for consumption outside the installation in the period beginning with the date of [F44 the submission of documents as part of the first stage of] the application and ending with 31 December 2026, the 2026 scheme year;

(b)

if the installation first produces electricity (other than relevant CHP electricity) for sale for consumption outside the installation on or after 1 January 2027, the scheme year in which the installation first produces such electricity.

Textual Amendments

F32 Arts. 2b, 2c inserted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 14 (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F33 Words in Art. 2b heading substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(2)

F34 Word in Art. 2b(1) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(3)(a)

F35 Words in Art. 2b(1) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(3)(b)

F36 Words in Art. 2b(2) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(4)

F37 Words in Art. 2b(3) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(5)(a)

F38 Word in Art. 2b(4)(a) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(6)(a)

F39 Words in Art. 2b(4)(a) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(6)(b)

F40 Words in Art. 2b(5)(a) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(7)(a)

F41 Words in Art. 2b(5)(b) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(7)(b)(i)

F42 Words in Art. 2b(5)(b) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(7)(b)(ii)

F43 Words in Art. 2b(6)(a) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(8)

F44 Words in Art. 2b(10)(a) inserted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 36(9)

Article 2c U.K. Meaning of “electricity generator” and “relevant CHP electricity”

1. In this Regulation, “electricity generator” must be construed as follows.

2. In relation to a deemed application for free allocation in the 2021-2025 allocation period or an application for free allocation in the 2021-2025 allocation period under Article 5, “electricity generator” means an installation:

(a)

that on or after 1 January 2005 produced electricity for sale for consumption outside the installation; and

(b)

at which the regulated activity referred to in column 1 of the first entry in table C in Schedule 2 to the UK ETS Order (combustion of fuels) and no other regulated activity (apart from one referred to in Article 2a(8)) is carried out.

3. In relation to an application for free allocation in the [F45 2026 allocation period or the 2027-2030 allocation period] under Article 4 or 5, “electricity generator” means an installation:

(a)

that in the relevant period produced electricity for sale for consumption outside the installation; and

(b)

at which the regulated activity referred to in column 1 of the first entry in table C in Schedule 2 to the UK ETS Order (combustion of fuels) and no other regulated activity (apart from one referred to in Article 2a(8)) is carried out.

4. For the purposes of paragraph 3(a), electricity produced for sale for consumption outside the installation in the relevant period must be ignored if:

(a)

it is relevant CHP electricity; or

(b)

it represents no more than 5% of the total electricity (not including relevant CHP electricity) produced at the installation in the relevant period.

5. In paragraphs 3 and 4, “relevant period” means:

(a)

in relation to an application for free allocation under Article 4, the baseline period;

(b)

in relation to an application for free allocation under Article 5, the period beginning with the start of normal operation and ending with the last day of the year before the year in which the application is made.

6. In this Regulation, “relevant CHP electricity” means, in relation to an installation, electricity produced at the installation by cogeneration at a cogeneration unit certified under the standard applying from time to time for the purposes of the Combined Heat and Power Quality Assurance Programme that produces electricity for consumption at the installation (and may also produce electricity for sale for consumption outside the installation).]

Textual Amendments

F32 Arts. 2b, 2c inserted (E.W.S.) (1.1.2024 immediately after S.I. 2023/850 comes into force) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 (S.I. 2023/1387), arts. 2(1), 14 (which amendment was extended to N.I. (1.1.2025) by virtue of S.I. 2024/1366, arts. 2(2)(a), 45(2))

F45 Words in Art. 2c(3) substituted (31.3.2025) by The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 (S.I. 2025/124), arts. 2, 37(2)

F46 Article 3 U.K. National administrative arrangements

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F46 Art. 3 omitted (31.12.2020) by virtue of The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 6

[F47 Article 3a U.K. Applications for free allocation under EU ETS to be treated as applications for free allocation in 2021-2025 allocation period by operators of incumbent installations

(1)

This Article applies where before 1 January 2021, the operator of an installation made an application (an “EU ETS application”) under Article 4 for free allocation of emission allowances under the EU ETS in respect of the allocation period in the EU ETS beginning on 1 January 2021

(2)

For the purposes of this Regulation:

(a)

the EU ETS application must be treated as an application (a “deemed application for free allocation in the 2021-2025 allocation period”) by the operator of the installation for free allocation of allowances under the UK ETS in the 2021-2025 allocation period;

(b)

the determination of historical activity levels under Article 15, and anything else done in connection with the EU ETS application under this Regulation, before IP completion day must be treated as done in connection with the deemed application for free allocation in the 2021-2025 allocation period.

(3)

Without limiting paragraph 2, in this Regulation—

(a)

a reference to a monitoring methodology plan includes a monitoring methodology plan approved for the purposes of the EU ETS application;

(b)

a reference to a baseline data report or a verification report includes a baseline data report or a verification report submitted for the purposes of the EU ETS application.]

Textual Amendments

F47 Art. 3a inserted (31.12.2020) by The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 (S.I. 2020/1557), art. 2(2), Sch. 1 para. 7

(1)

Directive 2014/32/EU of the European Parliament and of the Council of 26 February 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of measuring instruments (OJ L 96, 29.3.2014, p. 149).